EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of April 12,
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2001, is made by and among DTVN Holdings, Inc., a Delaware corporation (the
"Company"), and the persons listed on Exhibit A hereto who become parties to
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this Agreement by the execution and delivery of counterpart signature pages
hereto (individually, a "Stockholder" and collectively, the "Stockholders").
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W I T N E S S E T H:
WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated April
12, 2001, by and among the Company, Videos Intelligence, Inc., a Pennsylvania
corporation and wholly-owned subsidiary of the Company ("Sub"), Video
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Intelligence, Inc., a Pennsylvania corporation ("Video Intelligence"), and the
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stockholders named therein (the "Merger Agreement"), Video Intelligence will be
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merged with and into Sub (the "Merger"), and upon consummation of the Merger,
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Video Intelligence will cease to exist and Sub will be the surviving
corporation; and
WHEREAS, upon consummation of the Merger, the Stockholders will own shares
of the common stock, par value $0.001 per share, of the Company ("Common Stock")
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and options to purchase shares of Common Stock (individually, an "Option" and
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collectively, the "Options") as set forth in the Merger Agreement;
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NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants contained herein, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 Defined Terms. Each term used herein with its initial letter
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capitalized and not otherwise defined herein shall have the meaning set forth
below:
(a) "Closing Date" means the date on which the Merger is consummated.
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(b) "Registration Securities" means for each Stockholder, all of the shares
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of Common Stock received by the Stockholder pursuant to the Merger and the
shares of Common Stock acquired by the Stockholder from time to time upon
exercise of his or her Option, together with any and all additional shares of
Common Stock issued or distributed in respect of any such shares by way of stock
dividend or distribution or stock split; provided, however that any shares of
Registration Securities shall cease to be Registration Securities when (i) a
registration statement covering such shares has been declared effective under
the Securities Act and such shares have been disposed of pursuant to such
registration statement, or (ii) such shares have ceased to be outstanding.
(c) "Relinquishment Agreement" means the Relinquishment Agreement, dated of
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even date herewith, among the Company, Sub and the stockholders of the Company
named therein.
(d) "Shelf Registration Statement" means a registration statement under the
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Securities Act which provides for the sale of securities on a delayed or
periodic basis as permitted under Rule 415 promulgated under the Securities Act.
(e) "Securities Act" means the Securities Act of 1933, as amended, or any
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similar federal statute and the rules and regulations of the Securities and
Exchange Commission thereunder, all as the same shall be in effect at the time.
(f) "Stockholder Agreements" has the meaning assigned to such term in the
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Merger Agreement.
ARTICLE II
REGISTRATION RIGHTS
2.01. Piggyback Registration. Subject to the terms and conditions
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contained herein, if at any time during the one (1) year following the Closing
Date, the Company proposes to file a Shelf Registration Statement under the
Securities Act covering a proposed sale of Common Stock by another person or
entity (the "Primary Person") (other than a registration relating to any
employee benefit plan), the Company shall give the Stockholders written notice
of such proposed filing at least thirty (30) days prior to the anticipated
filing date, and such notice shall offer each Stockholder the opportunity to
include in such offering, at the Company's expense, such number of shares of
Registration Securities as they may request. Each Stockholder desiring to
participate in such offering must notify the Company no later than ten (10) days
following receipt of the notice given by the Company, which notice shall specify
the number of shares of Registration Securities such Stockholder requests to be
included in the offering. In the event the Company receives, within the required
time, a request from a Stockholder to include Registration Securities in the
offering, the Company shall include such Registration Securities in such
offering on the same terms and conditions as any similar securities of the
Company included therein, subject to the terms and conditions contained herein,
except to the extent prohibited by applicable law, rule or regulation.
2.02. Limitation on Amount of Registration Securities Included in
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Offering. Notwithstanding anything herein to the contrary: (a) the Company
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shall not be required to include shares of Registration Securities in any
registration if the managing underwriter or the Primary Person shall determine
that the inclusion of such Registration Securities requested to be registered
would have an adverse effect on the marketability or the price of the securities
proposed to be offered pursuant to the registration statement, in which event
the Company shall be obligated to include only such limited number, if any, of
Registration Securities in such offering as the managing underwriter or the
Primary Person, as the case may be, believes may be sold without causing such
adverse effect, which securities will be taken from those held by a group
consisting of the Stockholders proposing to sell Registration Securities and
other holders of securities of the Company having similar registration rights to
those of the Stockholders, on a
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pro rata basis and (b) the Company may at any time withdraw or cease proceeding
with the registration of Registration Securities if it shall at the time
withdraw or cease proceeding with the registration of the Common Stock
originally proposed to be registered, without any obligation or liability to any
Stockholder seeking registration of Registration Securities hereunder.
2.03. Furnishing of Information. It shall be a condition precedent to the
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obligation of the Company to take any action pursuant to this Agreement in
respect of Common Stock that is to be registered at the request of a Stockholder
that such Stockholder furnishes to the Company in a timely manner such
information regarding such Stockholder and the Registration Securities held by
such Stockholder as the Company shall reasonably request.
2.04. Participation in Underwritten Registrations. No Stockholder may
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participate in any underwritten registration hereunder unless such Stockholder
(a) agrees to sell such Stockholder's securities on the basis provided in any
underwriting arrangements applicable to such offering and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
2.05. Registration Not Required. Notwithstanding anything contained
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herein to the contrary, the Company shall not be obligated to register shares of
Registration Securities held by any Stockholder at any time following the first
anniversary of the Closing Date; provided, however, that in the event any
Registration Securities are covered by a registration statement hereunder that
was declared effective by the Securities and Exchange Commission prior to such
one (1) year anniversary, the Company shall continue to have the obligations set
forth in Section 2.06 below with respect thereto.
2.06. Obligations of the Company. Whenever, under this Agreement, the
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Company is required to register Registration Securities, it agrees that it shall
do the following:
(a) furnish to each Stockholder offering Registration Securities under such
registration statement such number of copies of the related prospectus as such
Stockholder may reasonably request;
(b) register or qualify the Registration Securities covered by such
registration statement under the securities or blue sky laws of such states
within the United States and Puerto Rico as each Stockholder participating in
such offering shall reasonably request; provided, however, that the Company
shall not be obligated to register or qualify such securities in any
jurisdiction in which such registration or qualification would require the
Company to qualify as a foreign corporation or file any general consent to
service of process where it is not then so qualified or otherwise required to be
qualified or has not so consented prior thereto;
(c) use all reasonable efforts to maintain the effectiveness of any such
shelf registration from the date it is declared effective by the Securities and
Exchange Commission (the "Effective Date") until the earlier of: (i) the later
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of (A) the one (1) year anniversary of the Closing Date or (B) nine (9) months
after the Effective Date; or (ii) the date upon which all the Registration
Securities which are included in such shelf registration have been sold; and
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(d) promptly upon the Company becoming aware of the issuance of any stop
order suspending the effectiveness of a registration statement, furnish each
Stockholder offering Registration Securities under such registration statement
notice thereof.
2.07. Market Standoff. In consideration of the granting to Stockholders
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of the registration rights pursuant to this Agreement, each Stockholder agrees
that, for so long as such Stockholder holds shares of Registration Securities,
except as set forth in Section 3.07, such Stockholder will not sell, transfer or
otherwise dispose of shares of Common Stock during the ten (10) days prior to
the effectiveness of any registration (other than a registration relating to an
employee benefit plan) of Common Stock for sale to the public and during the
ninety (90) days following the effectiveness of such registration, provided that
the underwriters for such offering request that the Stockholders be bound by
such restrictions.
2.08. Indemnification.
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(a) The Company agrees to indemnify, defend and hold harmless each
Stockholder against and in respect of any and all losses, claims, demands,
damages, liabilities, assessments, penalties, and reasonable costs and expenses,
including reasonable legal fees and expenses, (collectively, "Losses") resulting
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or arising from or otherwise relating to (i) any untrue statement of material
fact contained in any registration statement covering such Stockholder's
Registration Securities, or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (ii) any violation by the Company of the Securities Act or any
state securities or "blue sky" laws; except insofar as such Losses arise out of
or are based upon any untrue statement or omission based upon information
furnished to the Company by any of the Stockholders or underwriters for use in
such registration statement.
(b) Each Stockholder, severally and not jointly, agrees to indemnify,
defend and hold harmless the Company and its affiliates, and their respective
officers, directors, employees, representatives, agents and stockholders against
and in respect of any and all Losses resulting or arising from or otherwise
relating to (i) any untrue statement of material fact contained in any
registration statement, or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to the extent that such untrue statement or omission is based upon
information furnished to the Company by such Stockholder for use in such
registration statement, and (ii) any violation by such Stockholder of the
Securities Act or any state securities or "blue sky" laws, except insofar as
such violations arise out of or are based upon the registration statement
covering such Stockholder's Registration Securities.
ARTICLE III
MISCELLANEOUS
3.01. Transfer Restrictions. Nothing contained herein shall permit, or be
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deemed to permit, any transfer of shares of Common Stock if such transfer is
restricted or prohibited
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pursuant to the terms of the Relinquishment Agreement, the Stockholder
Agreements or otherwise.
3.02. Notices. Whenever this Agreement requires or permits any consent,
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notice, request, or demand from one party to another, the consent, notice,
request, or demand must be in writing to be effective and delivered in person or
sent by reputable express courier, facsimile, or registered or certified mail,
return receipt requested, in each case addressed (or faxed) as indicated below.
Any such written communication shall be deemed to be delivered, issued, given,
received and sent (a) if delivered in person, when actually received by the
person to whom notice is sent (with signed confirmation of receipt), (b) if
delivered by reputable express courier service, when actually received by the
person to whom notice is sent, (c) if delivered by facsimile, on the day sent if
transmitted (with confirmation of receipt) during normal business hours of the
recipient, or if not transmitted during normal business hours, on the first
business day following the day transmitted (with confirmation of receipt), or
(d) if delivered by registered or certified mail (whether actually received or
not), at the close of business on the fifth business day following the day when
placed in the mail, postage prepaid. A copy of all communications of a party
sent by facsimile shall be sent by registered, certified or first class mail, or
by courier service to the other party; provided that failure to so confirm such
facsimile communication shall not invalidate the communication given by
facsimile. Each party may change its, his or her address and facsimile number
for notice by giving written notice of such change to the other parties in the
manner provided in this Section.
If to the Company: DTVN Holdings, Inc.
635 West Campbell Road, Suite 130
Richardson, Texas 75080
Attention: Michael G. Donohoe, General Counsel
Facsimile: (972) 783-2573
If to a Stockholder: To the address for such Stockholder
set forth on Exhibit A hereto
3.03. Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE
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PARTIES UNDER OR PURSUANT TO THIS AGREEMENT, SHALL BE INTERPRETED AND CONSTRUED
ACCORDING TO THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO THE
APPLICATION OF CHOICE OF LAW RULES OF TEXAS OR ANY OTHER JURISDICTION THAT WOULD
DIRECT THE APPLICATION OF THE LAWS OF A DIFFERENT JURISDICTION).
3.04. Jurisdiction. Each Stockholder irrevocably and unconditionally submits
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to the exclusive jurisdiction of any State or Federal court sitting in Dallas,
Texas over any suit, action or proceeding arising out of or relating to this
Agreement. Each Stockholder irrevocably and unconditionally waives any
objection to the laying of venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. Each Stockholder
agrees that a final judgment in any such suit, action or proceeding brought in
any such court shall be conclusive and binding upon such Stockholder and may be
enforced in any other courts having jurisdiction over such Stockholder. Each
Stockholder agrees that he or she will not bring a suit, action or proceeding in
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respect of this Agreement in any other jurisdiction than as aforesaid.
3.05. No Waiver. No delay, failure or refusal on the part of a party to
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exercise or enforce any right under this Agreement shall impair such right or be
construed as a waiver of such right or any obligation of other parties, nor
shall any single or partial exercise of any right hereunder preclude other or
further exercise of any right. The failure of a party to give notice to the
other parties of any breach of this Agreement shall not constitute a waiver
thereof. Any waiver of any obligation or right hereunder shall not constitute a
waiver of any other obligation or right, then existing or arising in the future.
To be effective, a waiver of any obligation or right must be in writing and
signed by (a) the Company, if the Company is the party waiving such obligation
or right, or (b) the Stockholders holding a majority of the voting power of the
Registration Securities of all the Stockholders then outstanding, if the
Stockholders are waiving such obligation or right, and any such waiver shall be
binding upon all of the Stockholders.
3.06. Severability. If any provision of this Agreement is held to be
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illegal, invalid or unenforceable, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such illegal,
invalid or unenforceable provision, there shall be added automatically as a part
of this Agreement a provision as similar in its terms to such illegal, invalid
or unenforceable provision as may be possible and be legal, valid and
enforceable.
3.07. Assignment; Successors and Assigns. Neither this Agreement nor any
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rights hereunder may be assigned by any Stockholder without the prior written
consent of the Company, which consent may be withheld in the exercise of the
Company's sole discretion; provided that if shares of Registration Securities
are transferred by a Stockholder (a) under the Stockholder's will or pursuant to
the laws of descent and distribution, or (b) by gift to an immediate family
member (i.e., a spouse, child, parent, grandparent or sibling) or a family trust
for the benefit of immediate family member(s), then the registration rights
pertaining to such shares of transferred Registration Securities shall be
transferred along with such shares, so long as, in each case, the transferee(s)
deliver to the Company an executed written instrument agreeing to be bound by
the terms of this Agreement as if such transferee(s) were the Stockholder. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective heirs, executors, successors and assigns.
3.08. Entire Agreement; Amendment. This Agreement, the Merger Agreement
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and the agreements contemplated thereby constitute the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements, understandings and discussions relating to
such subject matter. No amendment, modification or termination of any provision
of this Agreement shall be valid unless in a subsequent writing and signed by
(a) the Company and (b) Stockholders holding a majority of the voting power of
the Registration Securities of all the Stockholders then outstanding, and any
such amendment, modification or termination shall be binding on all parties
hereto; provided that the consent of a party shall not be required for any
amendment, modification or termination of any provision of this Agreement if
such party is not adversely affected thereby.
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3.09. Section Headings; Pronouns. The section and paragraph headings
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contained herein are for reference purposes only and shall not in any way affect
the meaning and interpretation of this Agreement. Whenever the context may
require, any pronouns used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural, and vice versa.
3.10. Execution in Counterparts. This Agreement may be executed in any
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number of counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute only one
instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DTVN HOLDINGS, INC.
/s/ Hugh Simpson
By: _____________________________________
Hugh Simpson,
Chief Executive Officer and President
STOCKHOLDERS:
/s/ Philip O'Reilly
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Philip O'Reilly
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Bruce Hawkins
_________________________________________
Joy Thompson
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Bryan Morriss
_________________________________________
Scott Winterstein
_________________________________________
Joe Yapsuga
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_________________________________________
Michal West
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Roger Vergin
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Robert Harris
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EXHIBIT A
To Registration Rights Agreement
Stockholder Address
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Philip O'Reilly 12 Stanton Avenue
West Chester, PA 19382
Bruce Hawkins 6318 Sandstone Drive
Arlington, TX 76001
Joy Thompson 2407 Page Place
Mansfield, TX 76063
Bryan Morriss 1101 Loggins Trail
Poolville, TX 76487
Scott Winterstein 134 Manor Drive
Azle, TX 76020
Joe Yapsuga 1178 Windermere Drive
Pittsburgh, PA 15218
Michal West 8201 Mosstree Drive
Arlington, TX 76001
Roger Vergin 287 Devon Way
West Chester, PA 19380
Robert Harris 8 Scammel Drive
Yardley, PA 19067
A-1